You have correctly guessed that it is stupid. You don't want to know how it works. But I am going to tell you anyway.
"Normal" cryptomining attempts to find the answers to mathetmatical problem, in effect, everyone runs the software hoping to be first to find one of the solutions. Thus the more processing power you can throw at it the greater your rate of success (simple explanation because I myself am very simple). Storage based cryptos preserve this relationship between throwing resources at the problem and getting a return, but do it in a way so bone-headedly simple it's almost genius. Your allocated storage space is filled up with hashes generated according to the formula, each unique. Hashes are selected randomly from all unassigned in existence and if yours matches, you get crypto. Essentially, it's a lottery system with the amount of storage space you allocate equating to how many tickets you bought. I don't know the details and haven't cared to look. But it is arguably more sensible than traditional crypto in that it's far lower energy required. But also arguably seems more stupid because there is so little complexity that the arbitrariness of the nature of crypto is understandable to everyone rather than merely those who have thought about it a lot.
Anyway, now you know and you're stuck with it.